Gap Analysis: Riordan Manufacturing
Riordan Manufacturing currently is experiencing a disconnect between the organization leadership and the employees who make up the organization. This paper discusses the issues and opportunities Riordan faces to ensure the motivation and high level production of its employees as well as the stakeholder perspectives and ethical dilemmas that management faces in realizing its opportunities.
Issue and Opportunity Identification
Riordan Manufacturing, a global plastics producer with annual earnings of $46 million, has recently made across-the-board changes to the way it manufactures and markets products. The change came in wake of the organization’s declining sales and uneven profits over the past two years. Included in the change was an adoption of a customer-relationship management system which, provided customers with services by team instead of individuals.
The changes the organization made has brought many issues and opportunities to the forefront that the organization must tackle. The current rewards system is based loosely on performance and heavily on individuals and seniority. The organization must take this opportunity to develop a reward system that not only is based on performance, such as a merit pay system, but also based on work teams. “Effective merit pay systems crease a strong connection between the employees’ level of performance and the subsequent size of their salary increase” (Dreher & Dougherty, 2001, p. 40). Work teams link add-ons or increases in pay to divisional or company profits as compared to some predetermined goal (Dreher & Dougherty, 2001).
The research has shown that the organization is underpaying key positions. Based on the results of a recent competitive wage survey, the organization has concluded that programmers are being paid 15% below the market average. The organization is currently lagging behind the market in terms of its pay to key programmer. With this...